When you first sign a contract to finance your vehicle, you'll agree upon specific terms like the length and interest rate. If your financial situation has changed or you want to take advantage of more preferential terms, you may be wondering, "Can you refinance an Acura loan?" Our team of experts at Acura of Sherman Oaks is here to answer this common question.
What is Refinancing?
Simply put, refinancing your current auto loan allows you to replace your current contract with one that has different terms. The new lender will pay off your original loan, and you will start making payments to them instead. If you took out a loan when interest rates were relatively high and they've now dropped, you may decide to refinance your current deal to pay less for your new Acura vehicle.
When is it a Good Idea?
Whether refinancing is the right option for you depends on several factors. There are certain requirements that you must meet in terms of your car's age and the number of miles you've driven. You should also increase your credit score as much as possible before applying, since those with lower credit scores can have difficulty qualifying for improved interest rates.
Pros & Cons
Several excellent benefits come with refinancing your loan. Since the most common reason to refinance is to get a lower interest rate, you'll also have lower monthly payments. You can also decide to pay a portion of the car's value when refinancing, reducing your future payments even further. Refinancing also allows you to add or remove a co-signer if needed.
However, there are several possible downsides to consider with refinancing. There may be additional fees that occur when your new loan is processed and your application is filed. If you decide to extend the length of your loan to lower monthly payments, you may find that the added duration wipes out the savings you expected from a lower interest rate.
Visit Us in Sherman Oaks, CA, To Learn More About Refinancing
If you're ready to refinance your current Acura loan, contact our Sherman Oaks, CA, Acura dealership today. Once you're here, be sure to ask about our new Acura offers that may offer better interest rates and other benefits. Give us a call to get started!
